Even before Corona, Germany's inner cities were in crisis mode. Vacancies and declining frequency in the pedestrian zones, high rent pressure, an ever increasing number of chain stores, the disappearance of owner-managed shops and, of course, the competition from online trade - in recent years, these topics have not only occupied politicians and planners at conferences and congresses, but also a broad media public in press articles and focus programmes, some of which have dramatic titles.
The shopping city has been an absolute success model for decades. However, due to the dynamic changes in the world of retail, it is now having to contend with a far-reaching structural change. It is becoming increasingly obvious that the decades-long interaction of market forces (keyword: city building) and the orientation of our city centres as pure shopping areas has led to problematic monostructures in almost all larger cities, which are proving to be less crisis-resistant.
In almost all city centres today, trade and office uses dominate the picture. Important historical functions that used to be found in the city centres - such as housing, crafts, manufacturing companies, public institutions or small cultural facilities - were economically undermined in the course of the development of the city, were literally pushed aside or deliberately moved to other parts of the city. It is precisely these functions, which today prove to be supporting pillars and could attract people, that are missing in most inner cities. Instead, from the North Sea to Lake Constance, a self-reinforcing cycle of declining trade occupancy and declining attractiveness of the inner cities can be observed, which calls into question their last supporting pillars - and thus the functioning of the inner city as a whole.
The Corona shock has brought public life to a complete standstill. All inner cities are deserted. The situation seems like a bitter taste of the bleakest trading scenarios of recent years.
- Is the health crisis now being followed by the economic crisis? It is at least to be feared that some shops will not survive the shutdown despite government aid programmes. Many businesses that have already been hit by the crisis will probably not have the necessary liquidity to permanently compensate for the drastic slump in sales. Initially, the last small shops and restaurants are likely to be affected.
- At the same time, online trade benefits. It is still "in business" and is also making a name for itself as a reliable backbone of supply in times of crisis.
- The real estate sector is also coming under pressure. More and more retail groups are publicly announcing that they will proactively stop paying rent. This not only damages the relationship of trust between the players, but also leads to further slumps in sales. The main drivers are primarily the private owners* of commercial real estate.
- The pandemic could act as an accelerant, or as a push on the fast-forward button, suddenly causing future developments of structural change to pass by in fast motion.
- The Cologne Institute for Retail Research recently put forward a scenario that assumes that every fourth store will cease operations by 2030. Unfortunately, we have to reckon with a wave of bankruptcies that will thinn out the supply in the inner cities much more quickly. The consequence: a sharp rise in vacancies and increased trading down effects.
- This momentum is likely to reinforce the long-standing trend towards professionalization and branchization. Only the big players will remain. At the same time, Corona is likely to worsen the risk assessment and thus the creditworthiness of retail concepts. New players would find it more difficult to enter the market.
- Where the city was on the brink of collapse before Corona, things could now become gloomy. The developments accelerated and intensified by Corona could lead to a further drastic weakening of the inner city as a location. For many cities, this will lead to a considerable impairment of their narrative as a city as a whole.
What becomes important now
- Almost all German cities are now faced all the more with the task of completely rethinking their inner cities and reinventing them to a certain extent: Away from the shopping city to a real city centre with a broad mix of functions and uses.
- Now more than ever, it is important that all stakeholders and actors relevant to the inner city enter into a dialogue, develop a common understanding of the problem and develop a model that is supported by all and is oriented towards the long-term stability of the inner city as a location.
- In order to be able to act at all and gain influence in an environment dominated by the real estate industry, urban planning must re-equip its toolbox. Because it is clear that the classic concepts will not help with this task. What is needed now above all are new management concepts, new economic instruments such as fund models and also forms of active land policy.
- A future-oriented inner city development is not only a task of the public authorities, but also a joint task for society as a whole. New alliances and cooperation with foundations, companies and civil society are needed. The basis for this: An attitude of enabling, inviting and curating.
- It will now also be important to discuss the topic quickly at state and federal level in order to realign funding programmes where necessary and to enable cities to actively shape the transformation of their inner cities.